Impact of E-Commerce on Travel and Tourism: An Historical Analysis

By Mamaghani, Farrokh | International Journal of Management, December 2009 | Go to article overview

Impact of E-Commerce on Travel and Tourism: An Historical Analysis


Mamaghani, Farrokh, International Journal of Management


E-commerce is bringing new business opportunities to the global travel and tourism industry. Tourism-related institutions and Internet companies are joining to tap the potential market created by e-commerce. This paper is an historical analysis of penetration of e-commerce in the travel and tourism industry. The analysis identifies a number of consistent customer experience across different channels, among airlines, and involving both international and domestic travel in emerging economies with limited internet access. It is argued, from this analysis, that there area number of emerging new technologies such as mobile devices and global positioning systems which need to be taken into account and effects systematically assessed. The paper concludes that a major challenge facing the industry is to assess the impact of these technologies on different aspects of the travel industry and to find out how much value-added services they actually provide to consumers.

Introduction

Information technology has introduced e-commerce through the development of the Internet and the World Wide Web. These developments have impacted both consumer and industry behaviors in the areas of travel and tourism. Consumers have more options regarding vacation and budget planning. 95 per cent of web users have searched the Internet to gather travel related information. 93 per cent visited destination web sites and nearly one half used e-mail to gather travel-related information (Xinran, Dae- Young & Morrison, 2006). Almost three- fourths of online travel buyers used search engines prior to making their purchases. In addition to the Internet, technology gadgets such as GPS 's, mobile phones, smart phones and hand-held devices have improved consumers' tourism and travel experiences. Information accessibility regarding travel, destination, bookings, payments, hotels, attractions, and the quality of maps are areas for improvement.

Information and Communication Technologies (ICT) have affected the travel and tourism industry for at least 50 years, particularly in the areas of automation and networking of distribution channels. Local travel agents that used the global distribution system have adjusted marketing strategies and expanded services in order to realize increased competitive advantage. Local tourism business comprehension and utilization of the Internet has permitted increased visibility in additional market segments. Businesses have increased services globally by registering with online travel agents, online advertising agents, and inter-organizational reservation systems. In addition, many businesses have developed websites which offer planning, booking and payment services online for added consumer convenience. Businesses that have not made use of the Internet cannot compete and therefore they must grasp the opportunity before they are out-competed by those that have.

Information technology has played a central role in the growth and improvement of the travel and tourism industry. The lasting effects of technology are improved information accessibility, a higher level of competition, and a larger market of consumers and businesses around the globe.

Information Technology in the Tourism and Travel Industry

During the pre- computerized time, the role of the travel agent was to advise clients on travel destinations and to act as an intermediary in the complicated process of arranging travel bookings. Even as late as the early 1990's, consumers booked cruise travel and tourism through travel agents as many companies did not offer direct bookings. There were two waves of information technology that have had a major impact on the industry. The first of these is the development of the direct reservation systems, such as the American Airlines SABRE system. The second is the development of online sales channels via the Internet.

The SABRE system was developed by American Airlines in conjunction with IBM. …

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